The G20 New Delhi Leaders’ Declaration released on September 9 acknowledged the need to double the rate of energy efficiency globally by 2030. To achieve that, Vishal Kapoor, Chief Executive Officer (CEO) of India’s Energy Efficiency Services Limited (EESL) under the Ministry of Power, said focusing on the ‘cooling’ sector will bring the biggest and fastest gains. In an interview with Moneycontrol, Kapoor said EESL is planning to expand its client base to micro, small, and medium enterprises (MSMEs), offering 35 energy-efficient technologies to them.
Talking about EESL’s ambitious e-market on energy efficiency, he said it will be launched between October-end and November. Kapoor, who is also the CEO of Convergence Energy Services Limited (CESL), a subsidiary of EESL, spoke of the government’s plan to go big on electric cooking in India, be it solar or five-star induction. Edited excerpts of the interview:
The G20 Summit under India’s presidency has just concluded, and there has been an acknowledgement among the member countries of the need to double energy efficiency by 2030. But in India, are we talking and doing enough in the space of energy efficiency after the LED revolution?
It's not that energy efficiency is not getting the same attention in India as we see elsewhere. As per our estimate, so far, India has avoided at least 12 gigawatts (GW) of average peak power demand due to various energy-efficiency interventions. This means if we had not initiated the LED campaign, including the streetlight initiative, the smart metering revolution, or introduced star-rated appliances, then the demand would have been 12 GW higher.
And, mind you, all these campaigns, including the electric bus revolution that we are seeing now, were initially pushed and introduced by EESL or CESL.
Energy efficiency works only on the cost side, while in any other business, you put in money and then get the returns on the revenue side. Here, you're putting in money, but you're reducing your cost. So in most cases, energy efficiency is also cost efficiency. And when you are doing this, it doesn't click very well. It's invisible. It is not like creating a marquee project as we see in the renewables sector ― in the form of ambitious wind farms or solar parks, which are visible and tangible. Energy efficiency is not like that, but it saves you money.
Most of EESL’s clients are currently distribution companies (discoms) and municipal corporations, where recovery of payments has been a problem. Do you have any plans to expand into the commercial and industrial (C&I) sector?
What urban local bodies and discoms do is provide a big market, and these are low-hanging fruits. So, they are very helpful in creating large-scale interventions. But at the same time, even strategically, I believe that limiting your client base to one or two types is probably not ideal. We have to widen our client base, just as a simple de-risking measure.
We have to enter private institutions and even other government institutions in a big way. We are also trying to find ways of steering up the retail market without going directly into it. Similarly, it is on the product base also ― more types of products, more types of business models, and more types of clients. So this is definitely a part of our strategy.
MSMEs are also included in that. Big companies, I believe, are already doing good things, right? The real thing, the real potential, probably lies in MSMEs. The fortune lies at the bottom of the pyramid. Big companies have to comply with ESG requirements; so they are already on track. But it is the MSME sector which has a lot of potential. So, we are also looking at the MSME sector. We are working on 35 technologies that are energy-efficient, which we will offer to MSMEs as a solutions provider.
In July, EESL revealed its plan to install one crore (10 million) energy-efficient fans across the country. What’s the progress on that front?
We are going big on fans. We have already announced our intent to have at least one crore energy-efficient fans. Out of 66 crore fans in India, it's not a big deal to do a one-crore campaign. These will be primarily 5-star-rated fans. And then there may be a requirement for 3-star-rated fans as well. Even these are not being used to a great extent now.
In the first phase, we will target around 20 to 25 lakh fans, and so on.
So, just as we played a role in pushing incandescent bulbs out of the market, we are going to do something similar for fans now. In fact, fans will make an even bigger intervention in energy efficiency than bulbs. There are many areas where fans run for almost 12 months. Secondly, they run for 18 hours a day. A bulb will probably run for eight or nine hours maximum, but a fan is something that always runs. So, you can imagine the impact it will have.
As we go forward, estimates suggest that 60 percent of India's additional demand is going to come from cooling. The government has done a lot ― we have the India Cooling Action Plan and other interventions. The fan is a big part of cooling in India.
There may be people who say air conditioning has a higher load. Definitely, it is. But fans have a higher volume base.
I was coming for air conditioners. Are there no plans for the AC segment?
Of course, super-efficient air conditioners have to come in. In the global market today, even 5-star ACs have multiple versions. But the higher versions are not widely available in the Indian market because they are expensive. They're expensive because the demand is not there. So, we have to disrupt such dynamics. That’s why we are going for super-efficient air conditioners, which are ISEER 5.8 and 6.2 versions. Besides, we are also looking at WiFi-enabled ACs so that we can also provide a dynamic demand response at a later stage.
Have you set a target for the highest-rated ACs like there is for fans?
ACs ― my problem is that I am not able to fix a target because I have a huge demand.
When do you plan to launch the energy-efficiency electronic market place, and what is it going to offer?
We are planning to launch it sometime by the end of October or November. It is going to be a B2B market where we will provide top-rated energy-efficient appliances. On that portal, we will also be a service provider for end-to-end energy-efficient activities such as cooling, lighting, heating, and so on.
Through this platform, we are also aiming for transactional efficiency because we are making it an end-to-end service ― right from invoicing to product delivery. There will be direct delivery to the consumer, followed by routine inspections, calls, and so on.
What other interventions is EESL looking at?
The "Go Electric" campaign has to be hastened, and we are looking at cooking as an important segment of that. So, we are going to start an initiative on induction cooking and solar cooking.
But won’t promoting induction cooking further contribute to India’s growing power demand?
There is a clear-cut imperative to move away from fossil fuel-based energy. CNG or LPG ― these are ultimately fossil fuels, right? And then there are constraints coming in by way of import bills. So, the hydrocarbon-based thing has to move out. When you're moving your cars or scooters from fossil fuel to electric, there is a clear-cut case that the future is electric. It is a no-brainer. It has to be electric, including cooking.
Now, your point on the increase in power demand. Yes, it is going to increase. But let us also understand that if you see the way the power sector is growing, the increase is more on the renewable side. So, to that extent, I don't think there is any problem.
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